In five pages this paper discusses the advantages and disadvantages of placing as it pertains to U.S. share issues' placement. Four sources are listed in the bibliography.
Name of Research Paper File: TS14_TEplacei.rtf
Unformatted Sample Text from the Research Paper:
when selling shares regarding the way the market will perceive them and the associated costs them may result in an under subscribed issue. One way that this uncertainty may be
reduced will be if the shares are offered not on a general subscription offer by through placing (Howells and Bain, 1998). In the United States, this is also known as
placement. This is the sale of shares in a company, but instead of being open to the public only a selection of institution or investors are offered the shares.
This is a method of selling shares to raise capital in a company and may be undertaken for the initial flotation or for subsequent share purchase sales in order to
raise capital for a company that is quoted. The capital raised will be passed directly to the company minus the relevant charges, such as stamp duty and the brokers charges.
There are many advantages and disadvantages to this type of offer. One of the major advantages is that this type of offer is the lowest cost options. There are
not the same level of costs incurred due to the lack of need for marketing and the way the offer is made. However there is the need here for a
very careful choice of stockbroker to make the offer. When we consider these types of offer the success or fail will rely not only on the actual price setting
and attractiveness of the company, but also in terms of the power, contracts and persuasion of the stock broker. The company may be a very good investment, but if he
placing is not offered to the relevant investors then the issue will not be a success. Therefore, a broker will need to be able to have the right contacts. This